top of page
  • kiel85

IRS Fresh Start Program

The IRS has implemented its “Fresh Start Program” for several years now. Yes, this is the same fresh start program that you may have heard about from television and radio advertisements. The goal of the IRS program is to make it easier for taxpayers to pay their tax liabilities and potentially avoid the filing of tax liens. The program has three main features that are beneficial to taxpayers:

First, the program addresses tax lien filings. The program was implemented so that a Federal Tax Lien would not be filed until the tax liability eclipsed $10,000. Unfortunately, based on experience, it appears that the IRS has been filing Notice of Tax Liens for amounts below the $10,000 threshold. Many of these lower lien filings concern liabilities that have been ignored and liens that the IRS feels may be noncollectable through an installment agreement.

Second, the program is meant to streamline installment agreement requests concerning tax liabilities. Generally, if a taxpayer owes $25,000 or less, the IRS can establish an installment agreement for the taxpayer without needing a Form 433-A, Collection Information Statement, from the taxpayer and without filing a tax lien. Installment agreement requests under this threshold have become easier to implement, as long as the taxpayer does not have an egregious history of installment agreement defaults.

The streamline option has also made installment agreement requests less burdensome for individuals owing more than $25,000 but less than $50,000. A taxpayer owing below $50,000 can enter into an installment agreement up to 72 months, or up to the number of months necessary to satisfy the tax liability in full prior to the collection statute lapsing, whichever is less. A Collection Information Statement should not be required, but collection agents may request income and expense verification to determine the taxpayer’s ability to pay. The taxpayer must pay the liability via a monthly direct debit payment to the IRS. Collection agents will make a determination whether filing a tax lien is appropriate, though according to the program a lien filing is not necessary. If a taxpayer owes over $50,000 a Collection Information Statement will be required, and a lien will be filed.

Third, the program has expanded and attempted to streamline the IRS Offer in Compromise program. An Offer in Compromise allows a taxpayer to settle their tax liability for less than the full amount, if the taxpayer qualifies under the program. If the IRS determines that the Offer amount represents the most the IRS can reasonably expect to collect from the taxpayer, the offer may be accepted. If the IRS determines that the Offer amount is below what the taxpayer could pay in a lump sum or through an installment agreement, the Offer will likely be denied as not in the best interests of the government.

The Fresh Start Program expanded the Offer in Compromise program to a larger number of taxpayers. It is one of the most utilized programs offered by the IRS. Due to the overwhelming popularity of the program delays in having an Offer reviewed are common.  More information concerning Offer in Compromises can be found here.

The Fresh Start Program has made it clear for both taxpayers and IRS employees how to handle an individual’s tax liabilities based upon certain liability thresholds. If you owe the IRS back taxes, or are receiving collection notices from the IRS, attorneys at Lake Shore Legal can be of assistance. Our attorneys are experienced with dealing with IRS employees and in utilizing the Fresh Start Program to the benefit of the taxpayer. Contact Lake Shore Legal today.

21 views0 comments

Recent Posts

See All

IRS Penalty Abatement Relief

Most clients who come into the office with tax issues are stunned when they look at the tax liabilities assessed by the IRS. These liabilities are made up of the underlying tax owed along with penalti

Gifting to Reduce Your Massachusetts Estate Tax Exposure

The 2017 tax bill proposed by President Trump and passed by the House and Senate drastically increased the federal estate and gift tax exemption amount. Prior to the bill’s passage, an individual had


bottom of page